Treasuries Stop Friday Skid, Still Headed for Lousy Quarter

By Michael Aneiro

Treasury prices, which were in free-fall for about two hours this afternoon, have righted themselves, with 10-year yields holding steady for about the past two hours and currently reading 2.214%, according to Tradeweb.

Still, it’s been a quarter to forget for government bonds, as 10-year yields entered 2012 at 1.873% (and yields move inversely to prices). A selloff earlier this month snapped Treasuries out of their placid range-bound ways of the previous several months. Things calmed down for the past couple of weeks, soothed by the dulcet tones of Ben Bernanke, and all was well. Then things went a bit nuts this afternoon, so really who knows what to expect next quarter.

What we do know is that Treasuries are poised for their worst three-month period since late 2010, with U.S. government securities down 1 percent since Dec. 31 according to Bank of America Merrill Lynch data. This during a quarter when stocks saw record gains, with the Dow Jones Industrials up 994 points, or 8.1%, and the S&P 500 gaining 150.87 points, or 12% amid signs of a strengthening U.S. economic recovery. High-grade corporate bonds gained 2.48%, and high-yield bonds were up 5.1%.

On Friday afternoon, the iShares Barclays U.S. Treasury Bond Fund (GOVT), which launched earlier this quarter, was down 7 cents to $24.63.